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    SEC vs. Baguio Country Club

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    Caitlin Kintanar
    The SEC was requested to compel Baguio Country Club (BCCC) to hold its annual board of directors election in 2002 due to the nullity of BCCC's amended bylaws granting directors a two-year term, which violates the one-year term limit under the Corporation Code. BCCC claimed the amended bylaws were approved by the SEC and the petitioners lacked standing. The SEC ruled the two-year term amendment was unlawful and ordered BCCC to amend its bylaws and hold new elections. However, the petitions were denied as moot since BCCC amended its bylaws in 2005 to restore the one-year term limit, eliminating the need for any relief or SEC intervention regarding the prior disputed provision.

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    SEC vs. Baguio Country Club

    Uploaded by

    Caitlin Kintanar
    331 views2 pages
    The SEC was requested to compel Baguio Country Club (BCCC) to hold its annual board of directors election in 2002 due to the nullity of BCCC's amended bylaws granting directors a two-year term, which violates the one-year term limit under the Corporation Code. BCCC claimed the amended bylaws were approved by the SEC and the petitioners lacked standing. The SEC ruled the two-year term amendment was unlawful and ordered BCCC to amend its bylaws and hold new elections. However, the petitions were denied as moot since BCCC amended its bylaws in 2005 to restore the one-year term limit, eliminating the need for any relief or SEC intervention regarding the prior disputed provision.

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    The SEC was requested to compel Baguio Country Club (BCCC) to hold its annual board of directors election in 2002 due to the nullity of BCCC's amended bylaws granting directors a two-year term, which violates the one-year term limit under the Corporation Code. BCCC claimed the amended bylaws were approved by the SEC and the petitioners lacked standing. The SEC ruled the two-year term amendment was unlawful and ordered BCCC to amend its bylaws and hold new elections. However, the petitions were denied as moot since BCCC amended its bylaws in 2005 to restore the one-year term limit, eliminating the need for any relief or SEC intervention regarding the prior disputed provision.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    331 views2 pages

    SEC vs. Baguio Country Club

    Uploaded by

    Caitlin Kintanar
    The SEC was requested to compel Baguio Country Club (BCCC) to hold its annual board of directors election in 2002 due to the nullity of BCCC's amended bylaws granting directors a two-year term, which violates the one-year term limit under the Corporation Code. BCCC claimed the amended bylaws were approved by the SEC and the petitioners lacked standing. The SEC ruled the two-year term amendment was unlawful and ordered BCCC to amend its bylaws and hold new elections. However, the petitions were denied as moot since BCCC amended its bylaws in 2005 to restore the one-year term limit, eliminating the need for any relief or SEC intervention regarding the prior disputed provision.

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    © All Rights Reserved
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    SEC vs.

    Baguio Country Club or extended by agreement of the


    parties or by those interested in the
    position, thus BCCC's amended by-laws
    FACTS: granting its board of directors a two (2)
    year term is void, notwithstanding the
    Atty. Manuel R. Singson, acting for and SEC's prior approval. 23 Pursuant to
    in behalf of Ramon K. Ilusorio and Section 5 of the Securities Regulation
    Erlinda Ilusorio (the Ilusorios) Code, the SEC has the authority to
    requested the SEC, via a letter- compel BCCC to amend its by-laws to
    complaint, to compel BCCC to hold the conform to Section 23 of the
    annual election of the board of Corporation Code, and to impose
    directors for 2002 in view of the nullity sanction on the recalcitrant BCCC
    of the above-quoted provision in the officers and board members.
    amended by-laws. He informed the
    SEC that sometime in 2001, a According to the CA, the matter
    stockholder of BCCC requested for the between the parties is an
    opinion of the SEC on the validity of the intracorporate dispute, being between
    amendment, particularly the two (2) a stockholder and the corporation
    year term of the board of directors; and itself, as well as other stockholders,
    that in response, the SEC opined that particularly those occupying positions
    the amendment increasing the term of in the board of directors. Further, the
    office to two (2) years is contrary to SEC's jurisdiction over all cases
    law, particularly Section 23 of the enumerated under Section 5 of
    Corporation Code which limits the term Presidential Decree No. 902-A,
    of office to only one (1) year. including intra-corporate controversies
    has been transferred to the appropriate
    In its Comment to the said letter, BCCC Regional Trial Courts by virtue of
    claimed that its amended bylaws have Republic Act (RA) No. 8799 (The
    already been approved by the SEC and Securities Regulation Code). Thus, the
    that the petitioners have no standing to dispute pertains to the regular courts.
    question the said by-laws, not being
    stockholders of the BCCC.

    SEC, through the Corporation


    Registration and Monitoring ISSUES:
    Department, issued an Order ruling
    that Article 5, Section 2 of the amended 1. WON the amendment increasing
    by-laws of BCCC violates Section 23 of the term of office to two (2)
    the Corporation Code on the term of years is contrary to law.
    office of members of the board of 2. WON the matter between the
    directors and should be amended to parties is an intracorporate
    conform to the rules. The SEC also dispute which SEC has no
    ordered BCCC to conduct the annual jurisdiction of.
    election of members of the board.

    The one (1) year term rule for


    members of the board of directors is
    mandatory, and cannot be shortened
    HELD:

    The petitions must be denied.

    The petitions have been rendered moot


    by the 2005 amendment of the by-
    laws. The validity of the two (2) year
    term provision and the calling of
    meeting for the election of members of
    the board of directors to replace those
    holding a two (2) year term should no
    longer be in issue.

    In such instance, there is no actual


    substantial relief which a petitioner
    would be entitled to, and which would
    be negated by the dismissal of the
    petition.

    The Ilusorios initiated their query,


    which turned into a formal action,
    because of the SEC approved amended
    by-law provision extending the term of
    a member of the board of directors to
    two (2) years.

    Simply put, the Ilusorios merely


    invoked the SEC to exercise what it
    perceived to be the latter's power to
    compel BCCC to comply with the law
    pertaining to the term limits of the
    board of directors. With the
    amendment restoring the term of the
    board to one (1) year, there is no more
    illegal provision to speak of.

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